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Commonwealth of Massachusetts

Public Reprimand No. 2007-21



ANTONIO ABBENE JR.

Order (public reprimand) entered by the Board August 29, 2007.

SUMMARY1


In 2004, one of the respondent’s clients consulted the respondent concerning potential real estate investments. The respondent told the client that he had another client (the “borrower”) who was looking to purchase property in another state and needed additional financing. The respondent failed to tell the client that his obligations to the borrower did or might materially affect the respondent’s representation of the client, and the respondent did not obtain the client’s informed consent to the representation after consultation.

In early April 2004, the client and the borrower met at the respondent’s office and reached an agreement for a loan from the client to the borrower. The respondent was not present for the meeting. After the meeting, the borrower asked the respondent to draft a note and a mortgage. The borrower told the respondent that she had a lawyer from the state where the property was located who would review the note and record the mortgage. The respondent agreed to represent the borrower in drafting the note and mortgage. The borrower’s interests were directly adverse to the client’s. The respondent did not obtain either the client’s or the borrower’s consent to the representation after consultation with them.

The respondent drafted a note that carried a usurious rate of interest in violation of G. L. c. 271, § 49, and the applicable statute establishing the maximum allowable interest rate on loans in the state where the property was located. As security for the note, the respondent drafted a mortgage giving the client a secured interest in the property.

The respondent gave the note and mortgage to the client to review. The respondent did not advise the client to investigate the terms and conditions of the borrower’s purchase of the property. The respondent failed to tell the client that the respondent would not be responsible for recording the mortgage or that the borrower would use an attorney from the state where the property was located to record the mortgage. The respondent also did not inform the client that the note was or might be usurious in both states and would likely be unenforceable. Finally, the respondent did not advise the client to consult independent counsel regarding the terms and conditions of the loan or advise the client to retain counsel in the state where the property was located to review the transaction.

After the borrower had executed the note and the mortgage, the respondent, at the client’s request, agreed to guarantee the loan to the borrower. The respondent drafted and executed an interest-free 90-day note in which he agreed to pay the client the amount of the loan to the borrower. The note was unsecured and contained no provision for penalties, attorney fees or costs in the event of default. The terms of the note were not fair or reasonable to the client, and the respondent failed to explain the transaction fully to the client. In addition, the respondent did not give the client a reasonable opportunity to seek the advice of independent counsel or obtain the client’s informed consent in writing to the transaction.

The borrower purchased the property, but never had the mortgage recorded. In late July 2004, the borrower defaulted on the note.

Between August 20, 2004 and September 3, 2004, the respondent wrote three letters to the borrower demanding payment on the note by September 12, 2004, and warning that the client would take legal action. The borrower did not pay the client or respond to the letters. The borrower did not consent after consultation to the respondent’s representation of the client in seeking payment of the note.

When the borrower failed to pay the note, the client demanded that the respondent pay the note the respondent had executed. The respondent made payments over the course of eighteen months and then stopped making payments on the note.

On June 20, 2006, the client filed a complaint with the Office of the Bar Counsel alleging, among other things, that the respondent had not paid the client the balance of the note. After being notified of the client’s complaint to bar counsel, the respondent paid the client the balance of the note amount.

The respondent’s representation of both the client and the borrower without their consent after consultation violated Mass. R. Prof. C. 1.7(a) and (b). The respondent’s conduct in entering into a business transaction with the client when the terms of the transaction were not fair and reasonable to the client, the client was not given a reasonable opportunity to consult with independent counsel, and the client did not consent to the conflict of interest in writing violated Mass. R. Prof. C. 1.8(a).

The respondent’s failure to explain the matter to the client to the extent necessary for the client to make an informed decision about the representation violated Mass. R. Prof. C. 1.4(b). The respondent’s conduct in assisting the client in making a loan that the respondent knew, or should have known, violated G.L. c. 271, § 49; his failure to determine the legality of the terms of the note in the other state; and his failure to protect the client’s interests in the transaction violated Mass. R. Prof. C. 1.1 and 1.2(a)

The respondent’s representation of the client against the borrower in demanding payment of the note without the borrower’s consent after consultation violated Mass. R. Prof. C. 1.9(a).

This matter came before the Board of Bar Overseers on a stipulation of facts and disciplinary violations and a joint recommendation for discipline by public reprimand. On August 13, 2007, the Board accepted the parties’ recommendation and imposed a public reprimand.


1 Compiled by the Board of Bar Overseers based on the record of proceedings before the Board.



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